The first UN Conference on Trade and Development, which met in Geneva in
the spring of 1964, recommended the establishment of a permanent UN body
to deal with trade in relation to development. The General Assembly,
noting that international trade was an important instrument for economic
development and that there was a widespread desire among developing
countries for a comprehensive trade organization, decided to establish
UNCTAD as one of its permanent organs in December 1964.

The main purpose of UNCTAD is to promote international trade,
particularly that of developing countries, with a view to accelerating
economic development. UNCTAD is one of the principal instruments of the
General Assembly for deliberation and negotiation in respect to
international trade and international economic cooperation. It
formulates principles and policies on international trade, initiates
action for the adoption of multilateral trade agreements, and acts as a
center for harmonizing trade and development policies of governments and
regional economic groups. The 1992 conference reaffirmed UNCTAD's
functions to be policy analysis, intergovernmental deliberation,
consensus building, negotiation of international agreements, monitoring,
implementation, follow-up, and technical cooperation.

UNCTAD has 191 member states and has granted observer status to a number
of organizations. There have been 10 sessions of UNCTAD at approximately
four-year intervals: Geneva (1964); New Delhi (1968); Santiago (1972);
Nairobi (1976); Manila (1979); Belgrade (1983); Geneva (1987); Cartagena
de Indias, Colombia (1992); Midrand, South Africa (1996); and Bangkok,
Thailand (2000).

At the ninth session of UNCTAD, in May 1996, UNCTAD's new mandate
sought to deal with:

• the interests of developing countries;

• competition and its relation to the law and the environment
in developing countries;

• support for small and medium-sized enterprises;

• and to consolidate the Trade Point Network.

The outcome of the ninth session was a comprehensive agreement by the
member governments of UNCTAD on the treatment of development and a
concrete program of work, to be implemented by UNCTAD before the next
general session in 2000.

In his closing statement of UNCTAD-X, Secretary-General Rubens Ricupero
concluded that to date global integration had affected only a dozen
developing countries. He called for "real reciprocity," a
new international order that would remove massive barriers to trade in
agriculture, textiles and clothing; give developing countries
recognition for their efforts in promoting economic solidarity—to
"strengthen the move towards positive economic
integration"; and transform existing international economic
institutions so that they can "bridge the interests of both
developed and developing countries."

Early in 2002, two years after the adoption of the Bangkok Declaration
and Plan of Action, the Trade and Development Board carried out a
detailed mid-term review of UNCTAD-X. At the mid-term review, Dr.
Surakiart Sathirathai, Minister of Foreign Affairs of Thailand, stated
that at UNCTAD-X the "risks and challenges of
globalization" were deliberated on, affirming that globalization
presends opportunities as well as risks and challenges. "Rapid
economic globalization, as a result of technological advancement and
liberalization of international trade, finance and investment, has led
to an expansion of global economic growth and development. The
imbalances of the globalization process, however, also produced severe
adverse effects on the development process of many less developed
countries, which are unable to adjust themselves to the fast pace of
globalization," he said.

Structure

The continuing work of the organization is carried out between sessions
by the Trade and Development Board (TDB), UNCTAD's executive
body, established by the General Assembly. The TDB implements conference
decisions and initiates studies and reports on trade and related
development problems. The TDB reports annually to the General Assembly
through the Economic and Social Council. It also serves as the
preparatory body for sessions of the conference.

The Trade and Development Board has several standing committees that
review trends and make recommendations in specific areas, including the
Commission on Trade in Goods, Services, and Commodities; the Commission
on Investment, Technology and Related Financial Issues; and the
Commission on Enterprise, Business Facilitation and Development.

Secretariat

The UNCTAD secretariat is located at Geneva. It provides service to the
conference, the TDB, and its subsidiary bodies. The Secretary-General of
UNCTAD is appointed by the Secretary-General of the UN and confirmed by
the General Assembly.

In May 1993 the UN General Assembly assigned the UNCTAD secretariat
responsibility for servicing two subsidiary bodies of the Economic and
Social Council: the Commission on Transnational Corporations and the
Commission on Science and Technology for Development (see the section on
"Economic and Social Development").

The UNCTAD secretariat also provided technical assistance to developing
countries in connection with the Uruguay Round of multilateral trade
negotiations which took place under the auspices of the General
Agreement on Tariffs and Trade (GATT). It continues to provide such
services for Doha Round of trade negotiations in connection with the
World Trade Organization, the successor body to GATT.

Export Promotion and Marketing

Export promotion and marketing are the responsibility of the
International Trade Center in Geneva, which is operated jointly by
UNCTAD and GATT. The center focuses attention on export market
opportunities and helps developing countries to train personnel in
marketing and export-promotion techniques and to set up the institutions
and programs necessary to build up modern export-promotion services.

Commodities

In 1980, the Agreement Establishing the Common Fund for Commodities was
adopted by the UN Negotiating Conference on a Common Fund. International
agreements also have been concluded for nine commodities—cocoa,
coffee, tin, olive oil, sugar, natural rubber, wheat, jute and jute
products, and tropical timbers. The fund came into operation in
September 1989.

At its 1976 session in Nairobi, UNCTAD adopted an Integrated Program for
Commodities aimed at setting prices for the primary commodities of
developing countries that would take into account world inflation,
monetary changes, and the cost of manufactured imports. As part of the
program, the Nairobi session agreed that steps would be taken to
negotiate a common fund for the financing of buffer stocks that would be
held or sold as conditions required, thus helping to end the wide
fluctuation in commodity prices that has plagued developing countries
dependent on these products as exports.

The eighth session of UNCTAD in 1992 recognized the need to formulate an
effective international commodity policy for the 1990s. Commodity
markets remained extremely depressed and most of the commodity
agreements achieved by UNCTAD in the 1980s had lapsed. In 1993 UNCTAD
began to develop a micro-computer-based commodity analysis and
information system (MICAS), which provides comprehensive, up-to-date
information on all aspects of commodity use, production, trade, and
consumption. The system assists developing countries in managing their
economies and competing more effectively in world markets.

Preferential Tariffs for Developing Countries

UNCTAD adopted the General System of Preferences (GSP) in 1968, giving
preferential tariff treatment in developed countries to manufactured
goods exported by developing countries. By 1999, operating programs gave
preferential treatment to more than
US$
70 billion worth of exports a year from more than 100 developing
countries. However, the conference recognized that the more advanced
developing countries benefited most from the system, and in 1992 efforts
were undertaken to include more agricultural products and some
"sensitive" industrial products.

Shipping

UNCTAD initiated the development of the 1978 UN Convention on the
Carriage of Goods by Sea (called the Hamburg Rules). By July 1993, the
Hamburg Rules had received 21 ratifications and entered into force on 1
November 1993.

The Convention on a Code of Conduct for Liner Conferences (1974)
provides for the national shipping lines of developing countries to
participate on an equal basis with the shipping lines of developed
countries. This convention became effective in 1983. In 1991 the
conference reviewed this convention and adopted guidelines towards its
more effective implementation. Technical and structural changes in liner
shipping since 1974 were taken into account. By December 1995 there were
78 contracting parties to the convention.

The UN Convention on International Multimodal Transport of Goods
(1980)
establishes a single liability organizational structure for the
international carriage of given consignments of goods entailing use of
more than one mode of transport. By July 1993 it had received seven
ratifications (entry into force requires 30 contracting parties). As of
2000, the convention was not yet in force.

The UN Convention on Conditions for Registration of Ships (1986)
introduces new standards of responsibility and accountability for the
world shipping industry and defines the elements of the genuine link
that should exist between a ship and the state whose flag it flies. By
July 1993 nine ratifications had been received (entry into force
requires 40 contracting parties accounting for 25% of the world's
tonnage). As of 2000, the convention was not yet in force.

UNCTAD also provides technical cooperation and specialized training
projects financed in part by UNDP. Training courses cover multimodal
transport, improving port performance, and the use of the Advance Cargo
Information System (ACIS) to enable shipping lines and railway companies
to track the movement of cargo.

Other Multilateral Agreements and Conventions

The Set of Multilaterally Agreed Equitable Principles and Rules for
the Control of Restrictive Business Practices (1980)
establishes international means for the control of restrictive business
practices, including those of transnational corporations, adversely
affecting international trade, in particular the trade and economic
development of developing countries.

Negotiations were begun in 1978 on an International Code of Conduct on
the Transfer of Technology. The provisions of the proposed code fall
into two broad groups: those concerning the regulation of the transfer
of technology transactions and of the conduct of parties to them, and
those relating to steps to be taken by governments to meet their
commitments to the code. In 1991 consultations were held on setting up
an intergovernmental group of experts to prepare ground for the
resumption of negotiations on the code of conduct.

As a result of these consultations, the Trade and Development Board
acknowledged that it was impossible at that time to obtain consensus on
the outstanding issues for a draft code of conduct. In 1993 the Trade
and Development Board established an Ad Hoc Working Group on
Interrelationship between Investment and Technology Transfer to examine
and encourage new initiatives on investment and technology policies that
would facilitate technology transfer. This group adopted a work program
aimed at examining issues of investment flows, transfer of technology
and competitiveness, technological capacity-building in developing
countries, and transfer and development of environmentally sound
technologies. In light of the ongoing work of this group, the
Secretary-General of UNCTAD recommended to the General Assembly in 1993
that further consultations on the code of conduct take place after the
completion of the activities of the Ad Hoc Working Group.

UNCTAD also elaborated the Modes Clauses on Marine Hull and Cargo
Insurance, which assists the insurance markets in developing countries
to produce their own insurance policy clauses and conditions. UNCTAD
also has prepared minimum standards for shipping agents that serve as
guidelines for national authorities and professional associations
establishing standards.

Debt Relief

In the area of money and finance, UNCTAD devotes particular attention to
the debt problems of developing countries and has negotiated measures of
debt relief for the poorer among those countries, as well as a set of
agreed guidelines for dealing with future debt problems. At its 1987
session in Geneva, UNCTAD recommended a number of policy approaches and
measures to deal with debt problems, resources for development, and
related monetary issues; commodities; international trade; and the
problems of the least developed countries—all aimed at
revitalizing development, growth, and international trade in a more
predictable and supportive environment through multilateral cooperation.

UNCTAD and the World Bank developed a joint program to extend technical
cooperation to developing countries in the field of debt management.
UNCTAD is responsible for the software component of the project. The
assistance is based on the development and distribution of the Debt
Management and Financial Analysis System (DMFAS), software designed to
enable debtor countries to analyze data, make projections, and plan
strategies for debt repayment. UNCTAD trains operators to use the
software. It also provides training for senior officials in raising
their awareness of institutional reforms that might be necessary for
effective debt management.

Least Developed Countries (LDCs)

In 2002 49 countries were classified as least developed countries
(LDCs). UNCTAD has taken a lead role in mobilizing support for LDCs by
organizing two UN conferences on LDCs. The first, held in Paris in 1980,
adopted the Substantial New Program of Action (SNPA), which defined
measures to be taken by LDCs to promote their own development. The
second, also held in Paris, in 1990, reviewed the implementation of the
SNPA and strengthened the program.

UNCTAD has given political impetus to the setting of official
development assistance at 0.7% of the GNP of donor countries. It also
has recommended improvement of International Monetary Fund's
compensatory financing facility for export earnings shortfalls of
developing countries and the creation of special drawing rights for
LDCs.

The eighth session of UNCTAD in 1992 requested that detailed analyses be
made of the socioeconomic situations and domestic policies of the LDCs,
their resource needs, and external factors affecting their economies.
The ninth session of UNCTAD in 1996 adopted the Midrand Declaration,
which called for greater partnership between developed, developing, and
the least developed countries.

From 14–20 May 2001, the UN held the Third United Nations
Conference on the Least Developed Countries—LDC III. The
eradication of poverty was the main agenda on the program. In 2002,
UNCTAD released a report on poverty in LDCs, "Escaping the
Poverty Trap," which was the first international comparative
analysis of poverty in the LDCs. It is based on a new set of poverty
estimates, which enable empirically based analysis of the relationship
between poverty, development and globalization.

Trade in the 21st Century

The 1992 conference identified four priority areas to be analyzed.

New International Partnership for Development.
To assist developing countries and countries in transition to market
economies increase their participation in the world economy.

Global Interdependence.
Emphasis to be placed on the international implications of
macroeconomic policies, the evolution of international trading,
monetary and financial systems, effective management at the
international level, and the consequences of enlarged economic spaces
and regional integration processes.

Paths to Development.
The conference called for studies of national development experiences
with a view to deriving useful lessons to inform future action. The
studies would include consideration of general economic management and
the relationships between economic progress and market orientation.

Sustainable Development.
The interaction between trade and environmental policies was to be
considered. The promotion and implementation of environmentally sound
technologies as elaborated at the UN Conference on Environment and
Development in 1992 were stressed.

The 1992 conference also discussed trade efficiency and the use of
electronic data interchange to reduce the cost of transactions. In July
1995, UNCTAD organized a World Symposium on Trade Efficiency in
Columbus, Ohio. The symposium was subtitled "New Technologies for
Efficient Global Trade; UNCTAD's Tradepoint Network." The
symposium united trade ministers, chief executives, and senior officials
in focusing on new technologies in the fields of banking, insurance,
transport, telecommunications, and information for trade. The promotion
of international standards for electronic commerce was a key component
of the symposium. The symposium also launched a worldwide process of
alleviating technical and procedural barriers that prevent poorer
countries from fully participating in world trade. UNCTAD is developing
a Trade Point Network of 100 operational trading points to facilitate
this process. At the end of 1999, 114 countries were participating in
UNCTAD's Trade Point Program.

In November 2002, UNCTAD handed over its Trade Point Program to the
program's beneficiaries, represented by the World Trade Point
Federation (WTPF). The WTPF was established in November 2000, with its
objectives being to open international markets to new participants and
to make them more competitive by giving them access to the most advanced
e-commerce technologies and information networks. The WTPF aims to
develop the Trade Point network in close cooperation with member states
while adhering to its developmental goals and assistance to weaker
players in international trade.

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